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tv   Bloomberg West  Bloomberg  August 20, 2014 11:00pm-12:01am EDT

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>> live from pier 3 in san francisco, this is "bloomberg west" where we cover innovation, technology, and the future of it is nice. ahead, hewlett-packard is getting a boost from improving pc sales reporting third-quarter earnings topping analyst estimates. this gives meg whitman a boost as she works to turn around the pc maker. we will take a look at the pc numbers in just a moment. twitter ceo dick costolo says they are suspending accounts that show imagery of american journalist james foley and execution. a video was posted on youtube but later removed. this is the latest change from the open internet policies many
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have embraced for years. uber is opening the app to developers. it to now be integrated into other applications allowing users to order a car without leaving the app. we will be talking about this news. first to the lead, hewlett-packard ceo getting a boost as she works to turn around the pc maker. the company reported record revenue $27.6 billion, up 1%. shares are falling in after-hours trading. however, the positive sales numbers could the sign that the turnaround plan is starting to have an impact since meg whitman
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took over. she has focused on bringing new products to market like water-cool the servers and 3-d printers. joining us is our bloomberg intelligence analyst anand srinivasan. thank you so much for joining us. are these numbers good? not so good? >> it is rather unremarkable. large companies particularly in tech when there is a turnaround, two steps forward and one step back. this was not genetically forward moving. >> more sideways? >> sideways, yes. the devil is in the details. more importantly, the consumer side of the pc business which has not seen growth in a long time had a very good quarter, 8% year-over-year growth. >> how would you rate meg whitman's turnaround plan so far. she said to give her five years. what grade would you give her?
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>> this was a complicated, large and ever multifaceted from a turnaround perspective. she has executed well so far. she has communicated well as well on that front. one step at a time. thus far they have been well communicated as well. >> would you say that is a beat? >> it's hard to grade on that scale. when you post revenue numbers, i would call that a complete success. >> what about these new products? 3-d printers, still a new market. is this real innovation? >> it does not move the needle for hp. let's the honest. pcs, enterprise, software.
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i want to see revenue growth in enterprise hardware. i want to see revenue growth in services and i want to see continued execution in pcs. i want to see something different, tagged on software. i think those things move the needle. that will be the turnaround success and those things will impact the top and bottom line. 3-d printing and water-cool the servers are nice, but they don't move the needle. >> do you think hp has it in them? does meg whitman have it in her to do those things to move the needle? >> that's a great question, emily. thus far her execution has been on point. she has done well and she has executed what she said she would execute on. thus far, it's having a result
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almost rice. >> they've announced 50,000 layoffs so far. do you expect more? does hp need to become a much leaner company? >> large tech enterprises that have been entrenched have the legacy of having built up large workforces. in order to execute and take the company in a different direction, part of the reengineering has to be done at a workforce level because it's a big portion of the cost. we can talk about you doing that through either jettisoning off entire businesses, like ibm has done in the low-end server front, or you take it slowly but surely tens of thousands of employees at a time. >> how about the partnership between apple and ipm? what impact does that have on hp? >> apple does not have a significant presence in the enterprise environment. it gives a greater presence
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after partnering with ibm, but i'm not so sure it's a direct threat to hp in the near-term particularly since we are talking about tablets where hp does not have that strong of a presence as of yet. >> bloomberg intelligence analyst anand srinivasan, thank you as always for stopping by. coming up, twitter taking action to remove video and photos of james foley's death. should companies like twitter and google be involved in blocking news? we discuss that next. ♪
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>> i'm emily chang and this is "bloomberg west" on bloomberg television, radio, streaming on your tablet and on
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the killing of journalist james foley has caused concern from silicon valley to the white house. president obama took a break from his vacation to speak about the execution. >> friends and allies around the world, we share a common security and a common set of values rooted in the opposite of what we saw yesterday. we will continue to confront this hateful terrorism and replace it with a sense of hope and civility. that is what jim foley stood for. >> in response to graphic videos and images posted online, twitter started to block images of the beheading and suspended some user accounts. twitter ceo says we are actively suspending accounts as we discover them related to the graphic imagery. the video of that execution was posted on youtube but later taken down. this the latest example of
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social media companies increasingly policing user content, a big change from the open internet policies many have embraced for years. shortly after the release, #isismediablackout has been trending on twitter. i spoke to a law professor at uc hastings as well as an advocacy partner and david kirkpatrick. i started by asking if there are any legal issues. >> guarantees free speech as a right. this has mostly focused on fake things like violent videos for children and the like and not so much what happens in real news. the freedom of speech is curtailed mainly in issues concerning sex, obscene materials usually receive less
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of a protected status but is a lot less litigation surprisingly on violence and in recent weeks, we have been flooded with violent images from all over the world this being just the last of a series we are seeing from gaza, the ukraine. all of these things raise issues that have not been extensively litigated certainly not in the context of social media. >> it's not necessarily legal or illegal? >> the question is what is legal? as far as being charged with a criminal offense that is probably impossible in this is probably covered by free speech. there may be concerns with tort law. people who are closely related seen dead or mutilated or violently ravished on tv might have a legal civil claim against news media outlets saying that just watching the images and having them out there have
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caused distress. >> there may be a gray area. courtney, do you think there is a gray area here? >> i think the focus should be whether or not the videos are going against the terms of service of each of those organizations. twitter, facebook, youtube, google all have their own terms of service and they are within their rights to remove content if it violates terms of service. the focus should really be on the horrific case of james foley and what has happened there and the deadly conflict in the need for journalists to be able to report on this conflict without being murdered. it's the most deadly country for journalists in the world right now. >> david, i want to ask your thoughts on this. we tried to read the fine print today and it can get a little confusing. twitter says they will remove images or video of deceased individuals though they consider
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public interest factors like newsworthiness and they may not be able to honor all of these requests. facebook says they placed the burden on individuals to share responsibly when people share any content. they expect they will share in a careful way including warning people about the nature of the content. youtube says they have clear policies that prohibit content like gratuitous violence, hate speech, incitement and they also terminate accounts registered by a member of a is a gated foreign terrorist organization. you're familiar with the history following incidents like this. what do you make of what they have decided today? >> twitter seems to be in new territory and actively suspending the accounts of people who put up that imagery. even mistakenly suspended the account of the journalist who reported the existence of the video even though he never
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linked to it himself. they are in a serious gray area. as those of us are reading the terms of service of twitter this morning, it is not clear that they have been violated by this video to the degree that someone's account should be suspended. it does seem the family of someone who is deceased has the ability to request twitter to remove imagery related to the death, which is probably what happened here in terms of the imagery itself but suspending accounts goes further and i think it is really something being defined as we speak and nobody really knows how it is properly handled. they have acquired extraordinary influence over the dissemination of information and yet they are conduits for individuals to be empowered to share. it's a very complex scenario. facebook does have clear rules that allow the company to remove
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ready much anything that it determines constitutes hate speech or is excessively violent. there's a lot of precedent to remove stuff. suspending accounts is a different area. >> facebook has been criticized for removing things and then they backtrack. david, you wrote the book on phase. how does mark zuckerberg think about these kind of issues? >> they tend to err on the side of free speech but they also have to consider their own liability. some of the situations are so brand-new that technology never made possible in the past and they are responding on a case-by-case basis. there is no real clear defined policy that can be applied in every situation. this is such a horrific incident and it seems that twitter is taking actions of the sort they have not taken in the past.
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i'm sure there's no way you can find any of this imagery in a way that i spoke knows about it. when you have 1.3 billion users, no matter how many algorithms you have in place preventing things from going up, you cannot stop everything the minute it happens. >> david kirkpatrick, bloomberg contributing editor, and an expert on facebook and twitter. uc hastings law professor hadar aviram and advocacy director courtney radsch. this is obviously a story we will continue to follow. coming up, how can you request uber outside of the app? teaming up with different apps to make it seamless. we talked to their senior vice president for business next. ♪
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>> welcome back to "bloomberg west." i'm emily chang. 47 arrested in ferguson as this continues to protest in the unarmed teenager shot, michael brown. the rest of the city is trying to return to relative calm. last night was the first time in four days authorities did not use tear gas. one group of volunteers have
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been broadcasting from the streets. argus radio has drawn thousands of viewers for streaming the protest from the ground. i'm joined via live stream from the streets of ferguson. first of all, what is the latest on the ground from your perspective right now? >> we are in clayton outside of the justice center were a small group of protesters have gathered. we do see a small police line and roping off of the area on the other side of the street to await news of the grand jury hearing. >> what sort of technology are you using to broadcast what you're seeing on the ground? >> we are using canon xf100 digital recorder and we have a live streaming broadcaster box
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and we use our service through live stream. >> what has been the reaction to what you are putting out there? i know you are the most popular live stream channel. what sort of response have you been getting from people who are watching this? >> the biggest response is gratitude for the dedication and time we have been putting forward in bringing this live streaming video uninterrupted to the viewers. it is something that the major networks are not able to do with scheduled programming. we can provide a continuous speed of the events on the ground as they unfold.
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>> obviously this is such a challenging controversial story. what sort of legal obstacles have you run into? has anyone tried to stop you from doing what you are doing? >> yes. legally, we've had the officers tell us -- and it's not just live stream but members of the mainstream media such as cnn, msnbc, all of the networks that are local affiliates in the area, we have been forced nightly to move out of the zone where the protests are going and retreat back to what has been the command centers several blocks down the street at target and that is where the national guard is staged. essentially we have been removed from having the ability to record or broadcast live what is going on when the events occur. >> we are actually seeing what you are seeing right now, your live stream from the streets of ferguson.
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it certainly looks peaceful right now, but things have been flaring up on and off. how are you expecting this to play out given you've been on the ground there for so many days now? >> the protests last night were really peaceful. we were live streaming. for an unknown reason after they had ended the nightly prayer and announced that everyone was together here in clayton at 9:00 a.m., we lost signal. many of the individuals in the media that were on the ground were reporting that they had no cell phone service and that was the first time our broadcasting unit showed an error with no connectivity to our live stream accounts. >> one of the things people have been discussing is the idea of more police and this has happened in other parts of the country, wearing cameras on
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their vests to sort of promote and ensure transparency. how do people feel about this there? >> many of the protesters that we have interviewed and documented on camera have been carrying signs that also expressed verbally the need for -- cameras in all of vehicles, the need for officers to wear mounted cameras on their uniforms in order to be able to actually document what is happening when these officers make the stops. >> that is something that we will continue to follow. it is something that the official authorities there are reportedly considering. mustafa hussein, founder of argus radio. thank you for your ports on the ground we will continue to monitor your live stream. coming up, how uber's api could help lyft. we speak to an executive next. ♪
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>> i'm emily chang in this is "bloomberg west" streaming on your phone, tablet, amazon fire tv, and apple tv. uber has launched a major campaign to win over users and regulator support. yesterday, they announced hiring president obama's former campaign manager david plouffe to lead policy and strategy. trish regan spoke to them about the move. >> it's about communication, policy, branding, and strategy and weaving back together to tell a story in the cities we are going to to get the data out
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there about how safe the rides are in the tens of thousands of jobs we are creating every month in the economic opportunity for drivers and making sure cities understand the progress that uber represents. >> uber ceo travis kalanick. then announce their opening their app up. joining me now to discuss the news, senior vice president for business, emil michael. it seems like you guys have an announcement every day these days. tell me about opening up the api to developers. if i'm ordering a cup of coffee at starbucks i can also get uber without leaving the app. >> what we are allowing third parties to do for the first time ever is get access to the uber
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platform and network they can build in the ability to price to see how long it will take to get from their home to the restaurant, airport to their hotel room all of those different use cases for all apps all over the world. >> anyone can do this with you guys? >> we are starting today with 11 big brand launch partners, but we're opening it up to the dorm room developer and all of the companies in every country in the world. i think you will see this proliferation start today and go through the rest of the year. >> we are looking at all the partners you are working with. you think they have a combined 200 million users? how many of them do you think of the new uber customers? >> hopefully all of them. [laughter] >> what are you targeting? >> today, uber is available in being used by tens of millions of users.
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tomorrow, with smartphone penetration and new apps launching we will be on billions of phones next year. >> there have been reports about integrating with facebook and messenger. what about something like that? >> if you look at what the api can do, it can be integrated to maps, commerce, anywhere where you're trying to go from one place to another alone or with groups. >> you're the guy driving these conversations. behind the scenes, what is that like? >> when you are a deal guy, you deal stuff. >> uber also launched corner store, something you are testing in washington dc to deliver anything. how does that work? >> when he walked into walgreens or a corner store to buy the collection of stuff you buy every day, what are those most
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used or bought items? we will put them in lots of cars all over the city so when you push a button, hopefully they will be no more than five minutes away. >> that is something i could really use. when will you expand this? >> we are starting with washington, d.c., first. we let the city teens experiment with ideas and when they work, we refine the man rolled them out globally, so soon. >> what else can uber do? what about delivering mail? [laughter] >> travis said anything is possible. seriously. you guys are trying all of these big things. i wonder what is next. >> what you will see a lot from us is allowing third parties to incorporate uber into their app.
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we will start to deliver things and then you'll start to see all kinds of experiments. you have heard all of these startups saying that there is an uber for this and that. we want to be the uber for uber. >> there is a bill being voted on soon that would require more insurance for ridesharing which would affect that. you are asking people to write to their state senators or call their senators, sign petitions. what's been the response so far? >> we have had dozens of ceos of major corporations in california, tens of thousands of consumers, tens of thousands of drivers all petition to california rep and the governor because this in insurance is not what it seems to be. what it is doing is quadrupling the amount of insurance amount a driver has relative to a taxi. we have the same or better insurance than any other taxi company in the country. let me repeat that. in every city, we have better insurance and they are wanting to quadruple it beyond what we
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have today and that cost us to get passed onto consumers making it difficult for lower income consumers to use uber. >> emil michael, the deal guy, uber senior vice president for business. square has a recent partnership to help with business loans. you can watch us streaming everywhere. we'll be right back. ♪
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>> you are watching "bloomberg west" where we focus on technology and the future of business. square has acquired victoria park capital to expand its cash advance program. it allows small and medium-size businesses to take a short cash advance as opposed to an out right loan. they did not disclose terms but they will use the funds to finance for customers who need capital to grow.
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apple crossing an all-time high today topping the previous record of $100.72 as investors anxiously await a new iphone and a new wristwatch device. are these products really the big things we've all been waiting for or is apple struggling to find another hit? joining me to talk about this, roger mcnamee, cofounder of elevation partners and an early investor in facebook, yelp, and others. roger, as always great to have you back.
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you think that elevation has stalled and now it is trading at an all-time high. is it deserved? >> my issue with apple is that the software is not very good and they have made it less attractive and have failed to recognize some of the opportunities in the cloud available to them. the stock is still a tremendous discount from the s&p 500. the fact that it is an all-time highs against the context of being one of the cheapest stocks anywhere in the market. the value investor hat i wear gloves apple. it is so cheap that as long as the products can plug in and turn on some of the stock will be fine. the real question for apple is when we are going to wake up and realize that the cloud is the future of their world. their cloud product currently is terrible. it does not need to be. they are apple.
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>> is a phone with a bigger screen enough? >> i don't think it matters. new is what matters right now. apple has several things that went into the most recent current phone that are really tremendously innovative. one is the fingerprint security. another is airdrop, the local sharing of files. those things were only on one product that as things spread around, they become much, much more valuable. this generation will take that forward, but we are no longer in the early days of cell phones. it's really hard to get people excited about cell phone today. put out new products and ideally they will be great even if they are only ok, they are still going to be good enough because the stock is trading for significantly less. >> are you saying they could be a lot better when it comes to potentially connecting my home and my life? >> how about just getting icloud to work equally well? >> i think we've all had headaches. >> if i were in charge, i would recognize they have two operating systems, macintosh and
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ios. icloud is a third operating system and if they were to treat it as an equal partner rather than subordinating it to the other two the market opportunity would be at least as big as ios and that would make apple the cheapest stock in the market. i'm sure if it focused on cloud they would produce something really wonderful. >> what do you imagine they would produce? >> imagine that they have three really important pieces of data -- exactly what time it is, where you are, and your calendar. if you had all that stuff also available on the cloud, they
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could sit there and say, you need to leave a little early because the traffic is really bad on the 101 and it will take you longer to get to your next meeting. where these things really start to anticipate what you need because they know where you are, what time it is, where you are supposed to be. >> you don't think it is an innovation question? >> to me, it's really obvious that it's about execution of an engineering plan and apple's problem is not that they are missing the strategic point, that the cloud is a stand-alone business opportunity. think about the original ipod. it only worked with mac and the beginning it it did not take off until they opened it up to the whole world. the same thing as true and icloud. when they open it up, they will take over the world. who would not buy a cloud product from apple? if i were dropbox, that would be the only thing that would scare me. they exist because apple has failed to get this right. >> when it comes to hardware, if apple just announced a new, bigger phone, is that enough if there is no watch or tv? >> if the stock were priced like uber, it would be a big deal. the cash generation is so high and there is so much cash on the balance sheets and so little risk from a financial
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perspective come i just don't think it matters that much. >> we're going to talk about uber after the break. it seems to be the hot thing everybody wants to talk about. they have announcements every day. roger mcnamee from elevation partners will be right back after the break talking about uber facing some serious regulatory hurdles but now they have david plouffe to help. roger mcnamee back with his thoughts on the wider tech landscape next. ♪
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>> i'm emily chang and this is "bloomberg west." we are joined by roger mcnamee, cofounder and managing director or at elevation partners. i want to ask you about uber. they're facing major regulatory
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hurdles and they have just hired david plouffe. investors think that it is hotter than hot. how hot do you think uber is given all of the challenges? >> i think uber is genuinely important. they have looked at a horrible inefficiency in our economy, short-term transportation needs, and they have come up with an elegant solution. there are huge forces at risk that are trying to protect old markets, cabdrivers and all of that. consumers have voted and it feels to me right now as though every regulatory battle will be fierce and uber will win enough of them that it will succeed. to me, what is impressive about the company is it fits so well with this really important trend and urbanization, young people in particular moving to tight city places where they don't
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need to own a car or a home. frankly, they are going to go to a very interesting personal balance sheet to get rid of the debt. they will avoid homeownership and car ownership. by playing to that the cyst so directly and the lack of capital required i think they will be a huge company in 10 years. who knows what the return on $18 billion is. i just observe it in people feel about uber the way they feel about things that are really successful. they have the same feeling about this. it is like licorice. the people who like licorice really like licorice. not everyone has been exposed to it yet but most of the people think it's awesome. when you see that in the
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environment, the really important question is to look at the hurdles. is it possible to get past them? most of them are political. eventually they will be business hurdles and they will have to figure out how to deal with liability. there are going to have to figure out can they afford to own the cars which would really make them incredibly valuable if they could pull that off. as a lot of issues they have to still solve. i think the smart money says they have a real shot. you can choose what price you want to pay, but as someone who likes to see companies succeed, you just got talking to emil and he was really impressive. >> they have certainly pull together a really high-powered team. >> the thing that we've learned
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in silicon valley is that success is very situational and someone who has been moderately successful can be tremendously successful in another one. the thing about uber is the people who work there seem to be really well-suited. who knows if they could run general motors. >> this is the one that is going on. they're succeeding beyond her wildest dreams. >> what else could they do? they are delivering things and they are talking about taking on fedex. >> they don't have to do anything more to be really compelling. what they are doing now is so big that if they simply do it reasonably well it will be a big company. >> they could do more.
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>> to me, the opportunity comes from owning the cars. i imagine where they own 10% and when you're walking down the street, there are all of these uber cars. you can decide if you want a driver or you do not. if you do not, the way that zip car works today. i think that is a secret weapon that eventually causes them to be big enough to be one of the most important in our economy. if they are a reservation system, they will be very valuable. they will be exciting and really huge in our economy. >>, to ask you about the story regarding the killing of journalist jim foley on the policy that twitter is now suspending accounts relating to this video. this company has become so large. is it right? >> i look at this and i think every company is entitled to make a choice whether to have
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something on their site or not. i respect the decision of youtube and twitter. i also respect the point of view that in journalism, we should let consumers decide to watch or not watch. i would like for it to be available somewhere. it does not need to be on twitter or youtube. i think they are entitled to make those choices. what are the new rules relative to information disclosure. what bothers me is i would like to have a set of rules that allows people to have a thoughtful choice on something horrific, like the fully killing without stifling the absolutely critical the sedimentation of information about ferguson, missouri, and other places where the same rules could be applied in a way that would prevent the truth from getting out. as a society, we have to solve this problem.
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it existed before foley. look what's going on in ferguson. all of these journalists being arrested. >> is it a problem they can only selectively address this rule? there are hundreds or thousands of rules that they maybe have not thought about dealing with a bigger battle. >> my observation is they can make their own choices. i think they are entitled to do that. what is unclear from a societal perspective, how are we going to choose to deal with information. i rejoined to live in a first amendment world where it is out there and we can choose to watch or not? or will we live in a different kind of world. i do see an awful lot of forces out there and ferguson is a great example who believe it is their right to restrict public access. i look at the obama administration relative to the senate report on the cia spying stuff in the torture stuff.
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somehow, they think it's ok to restrict the public's right to know what was done in the name and i don't agree with that. i do not think the problem here is twitter and youtube. at the society level with our government and frankly our news organizations who constantly restrict this stuff. "the new york times" refuse to use the word torture after it was manifestly obvious to me it was a horrible piece of self-censorship. >> every company and news organization making those choices today. >> as always, thank you for stopping by and thank you all for watching this edition of bloomberg west. get all the latest headlines all the time on your phone, tablet, and ♪
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